Mexico Real Estate Priced in US Dollars
The Mexican Peso is at an historic low against the US Dollar these days. The weak peso is NOT because the Mexican economy is in decline. The peso decline has nothing to do with Mexico being a bad or unsafe investment for Americans and Canadians. Some of the reasons are tied to global issues, including the very low price of oil (one of Mexico’s biggest exports), Brexit, the US Central Bank keeping interest rates in the US low, and now the Mexico real estate priced in US Dollars uncertainty on what will be the policies for trade, immigration, and national security under President Trump. You can buy more Mexican pesos with US dollars now than you could a year ago and prior. While prices do seem to go up in some areas (mostly tourist areas) to compensate for the change, a great many prices, especially the set prices in regular stores and services (non-tourist items and services), have remained unchanged or have changed little. A bracelet selling for 100 pesos was $8. USD when the peso was 12 to one US dollar. Now100 pesos are $5. USD with the peso at 20 to one US dollar. In Mexico, even if a condo (or house, or land, etc.) is purchased in US dollars, it will be recorded in pesos. The Mexican peso is the national currency of Mexico and sales recorded at the Public Registry will be recorded in this currency. If you paid $150,000. USD when the peso was at 12 to 1, it was recorded as a purchase of 1,800,000. Pesos MN in your escritura. If you are selling it now, for $150,000. USD, when the peso is 20 to 1, it is recorded as a sale of 3,000,000. Pesos MN. You are going to receive more pesos than you paid originally. If you want to receive dollars back, then you have a gain of 1,200,000. Pesos or $60,000. USD. Capital gains tax is 35% of the gain. So you want deductions. You want as many as you can legally use, including credit for expenses you paid when you bought (these expenses should be in the factura you received from the notary at closing). If you bought 5 years ago, your US Dollar was weaker than compared to today. When you want to resell and receive US Dollars back, you are affected by the weakness or strength of the official currency in the country where the real estate exists.